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Lighthizer Lays Out U.S. Problems with WTO as Ministerial Meeting Gets Underway

Tuesday, December 12, 2017
Sandler, Travis & Rosenberg Trade Report

In his opening statement at the World Trade Organization’s 11th ministerial meeting, U.S. Trade Representative Robert Lighthizer enumerated concerns that have helped throw the WTO’s future into doubt. The Trump administration’s critical approach toward the WTO, spurred by a belief that it treats the U.S. unfairly, slowed the organization’s work in 2017 and has significantly lowered expectations for the biannual meeting.

Lighthizer called the WTO “an important institution” but said it has “serious challenges.” One is that “too often members seem to believe they can gain concessions through lawsuits that they could never get at the negotiating table.” Lighthizer questioned whether this is good for the WTO and whether the current litigation structure makes sense. This position perhaps explains why the U.S. has refused to approve new judges to sit on the WTO’s Appellate Body, which observers have warned risks severely slowing a number of important dispute resolution cases.

As an example of what the White House perceives as unfair treatment, Lighthizer said “there is something wrong … when five of the six richest countries in the world presently claim developing country status,” which allows them to defer or avoid complying with some WTO rules. If these countries, along with “the vast majority of WTO members,” believe following the rules makes it harder to achieve economic growth, “then clearly serious reflection is needed.”

Continuing the theme of enforcement, Lighthizer said it is “impossible to negotiate new rules when many of the current ones are not being followed,” perhaps suggesting the U.S. will not participate in additional negotiations until its concerns on enforcement are addressed. He noted that the U.S. is pushing to “correct the sad performance of many [WTO members] in notifications and transparency,” which he accused some countries of intentionally circumventing.

In addition, Lighthizer indicated that the U.S. will seek to refocus the WTO on addressing challenges to making markets more efficient. For example, the U.S. is interested in revitalizing the standing bodies to ensure they are focused on new challenges such as chronic overcapacity and the influence of state-owned enterprises. The U.S. is also working with other WTO members in committees and elsewhere to address real-world problems.

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